PhRMA Nervously Watching Bill Amendments

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Despite hints to the contrary by the drug industrys top executive, pharmaceutical lobbyists are warning that a health care amendment by Sen. Bill Nelson (D-Fla.) threatens to unravel an $80 billion deal the industry struck with Senate Democrats and the White House.

At a Wednesday health care panel, Pharmaceutical Research and Manufacturers of America President Billy Tauzin suggested that his organization will continue negotiating with lawmakers on health care reform legislation and reserve judgment until a final bill emerges.

Its contingent upon a good bill, Tauzin said of his groups continued support of health care reform. We all have our own definitions of what a good bill looks like, but obviously there are tons of points of contention in all of these bills. How a final bill emerges and what it looks like obviously will be a judgment we all make.

The former Louisiana GOP House Member appeared with former Senate Majority Leader Tom Daschle (D-S.D.), Families USA Executive Director Ron Pollack and AARP lobbyist John Rother at a panel hosted by the Bipartisan Policy Center, a group started two years ago by Daschle and fellow former Senate Majority Leaders Howard Baker (R-Tenn.), George Mitchell (D-Maine) and Bob Dole (R-Kan.).

As of press time on Wednesday evening, the fate of Nelsons amendment was unknown. His proposal would allow the federal government to pay lower rates for prescription drugs for poor seniors through Medicaid, rather than Medicare  a plan that would likely leave drugmakers holding the tab. The deal that the industry struck with White House and Senate Democratic negotiators earlier this year specifically prevented such a move from being considered.

At a Finance panel markup this week, Nelson asked, If its good enough for Medicaid, why isnt it good enough for Medicare to bring the cost of drugs lower?

We get rebates ... the purchasing power of the federal government, bulk purchasing power to get the cost of drugs lower to Medicaid, Nelson said. If were able to achieve this goal of expanding affordable health care to nearly all Americans, then were going to have to do so and not take it out of the hide of the middle class or upending their coverage. And at the same time, we cant lower the quality of health care to seniors in the process.

Despite Tauzins assurances Wednesday to see the health care negotiations through, pharmaceutical lobbyists said the trade association and its members would have no option but to abandon their support of the bill if Nelsons amendment is adopted.

If it passed, I think PhRMA would be forced to oppose the bill, one lobbyist told Roll Call on Wednesday. It would be a huge loss for the reform effort, because PhRMA has been one of the single most vocal supporter of the Democrats health reform efforts.

Nelsons Democratic colleagues were rumored to be working furiously on Wednesday to torpedo his amendment. In late August, the Congressional Budget Office scored a similar House proposal and determined it would save the federal government $30 billion between 2010 and 2019.

But the cost likely would have to be absorbed by drugmakers, Congressional bean counters speculated.

According to CBOs estimates, enacting those changes would lead to an average increase in premiums for Part D beneficiaries of about 5 percent in 2011, rising to about 20 percent in 2019, the Congressional Budget Office wrote on Aug. 29. However, beneficiaries spending on prescription drugs apart from those premiums would fall, on average, as would their overall prescription drug spending (including both premiums and cost sharing).

Another lobbyist who represented pharmaceutical companies said Wednesday that, Were not backing away from the agreement and neither is Finance.

Finance is opposed to the Nelson amendment as well as other Democrats, the lobbyist said. Theyre getting a lot of pressure from other Democrats not to offer the amendment.

The source also said Nelsons proposal is the biggest target among the 564 amendments currently under consideration by the Finance panel.

Another lobbyist agreed that the proposal was the biggest legislative item this week on PhRMAs plate, but said the issue was moot.

It would be a deal-breaker if it were to pass, but its not going to pass, the source said.